If you want the picture to automatically display on the post, you must first upload it to a server on the internet, such as photopoint. I upload mine to my website. Once you do that, you click on the "IMG" button under the vB Code section when you are posting (right above the text box). Once that appears, type in the address of where your picture is located. It should look like this:
[*IMG]http://www.sitename.com/pic1.jpg[/IMG] , only take out the *.
If you don't have access to a server to upload your images to, you can just use the Attach file feature toward the bottom of the page.